CoStar Group has returned with an improved proposal to acquire Australian property portal Domain, upping its offer by 5.5% to AUD4.43 per share in a deal that now values the company at AUD2.8 billion (USD $1.8 billion).
The revised bid follows last week’s reports that Domain’s majority owner, Nine Entertainment, had asked for a higher price, targeting AUD4.65 per share. While the new offer doesn’t quite hit that mark, it represents a 42% premium on Domain’s closing share price before CoStar’s original approach on February 20.
CoStar CEO Andy Florance, currently in Australia, described the revised offer as the company’s “best and final” considering the lack of competing bids.
Domain’s board said it had entered discussions with Nine and agreed to open the company’s books, granting CoStar due diligence access.
In a filing to the Australian Securities Exchange, Domain said:
“The Domain board has unanimously determined to engage with CoStar and, subject to entering into an appropriate confidentiality agreement and exclusivity and process agreement, facilitate appropriate due diligence."
Despite the higher offer, Domain’s share price fell 4.5% to AUD4.27 in after-hours trading, while Nine’s stock also dipped 1.6%.
CoStar took a 17% stake in Domain on February 20, the night before its initial non-binding offer, surprising both Domain and Nine. The U.S.-based real estate data and marketplaces group is attempting to expand aggressively into residential classifieds globally, having acquired UK portal OnTheMarket in late 2023.
Domain, long the number two player in Australia behind REA Group, has struggled to keep pace in terms of scale and monetization. With CoStar’s resources and a track record of M&A, the bid could signal a brighter future for Domain—if Nine decides to sell.